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HDFC Bank may merit consideration as a long-term holding, but its scale and reported profit growth do not establish that its shares are attractive at today’s price. Investors need to assess the bank’s deposit and loan growth, margins, asset quality and earnings mix—and then compare its current valuation with its prospects and risks. The figures below are dated operating results, not a buy recommendation or a forecast of returns.
What the latest full-year figures say—and what they don’t
HDFC Bank’s Integrated Annual Report 2024-25 reported higher profit and net interest income, alongside faster deposit growth than advance growth. These figures describe the year ended March 31, 2025; they should not be read as current-quarter results or as evidence that the shares are undervalued.
| Measure | FY2024-25 reported figure | What investors can learn |
|---|---|---|
| Net profit | ₹67,347.4 crore, up 10.7% | Profit grew over the reporting year, but the figure alone does not establish the sustainability of earnings or the stock’s value. |
| Net interest income | ₹1,22,670.1 crore, up 13.0% | Interest income after interest expenses increased; investors should consider this alongside margin and funding-cost trends. |
| Net interest margin | 3.48% | This is a full-year baseline, not a forecast. Later results are needed to assess direction and drivers. |
| Advances | ₹26,19,609 crore, up 5.4% | Loan growth was slower than deposit growth in this financial year. |
| Deposits | ₹27,14,715 crore, up 14.1% | Deposits grew faster than advances in this financial year, in the context of balance-sheet calibration after the merger. |
| Gross non-performing assets | 1.33% of gross advances as of March 31, 2025 | This is a dated asset-quality measure, not a current-quarter assertion. |
| Credit-to-deposit ratio | 96% as of March 31, 2025, versus about 110% at the time of the merger | The ratio declined over that period; investors should follow subsequent disclosures to see whether funding and lending remain balanced. |
All figures in the table are from HDFC Bank’s Integrated Annual Report 2024-25. A bank’s growth rates should be interpreted in context: changes in its balance sheet after a major merger can make comparisons with earlier periods less straightforward.
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HDFC Limited, the mortgage lender, merged into HDFC Bank effective July 1, 2023. The bank’s balance sheet now includes the former HDFC Limited mortgage business, and FY2024-25 was the first full financial year after the merger. That makes the reporting period an important reference point, but not proof that integration or balance-sheet adjustment is complete.
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In its 2024-25 annual report, the bank described deliberately moderating loan growth while working to lower its credit-to-deposit ratio and reduce higher-cost borrowings. Then-chairperson Atanu Chakraborty wrote, “We consciously calibrated our loan growth in FY25 to reposition the balance sheet.” For investors, the key question is whether deposit gathering, funding costs and lending can support sustainable growth as the balance sheet evolves.
What to examine in future results
Deposits, funding mix and lending
Look at deposit growth alongside advances, rather than treating either figure as a stand-alone measure of strength. Follow reported deposit composition—including CASA and term deposits when disclosed—and the cost of deposits. A falling credit-to-deposit ratio may reflect balance-sheet adjustment, but the ratio by itself does not show whether the bank can fund future lending efficiently.
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Margins and funding costs
Net interest margin helps show how effectively a bank earns on interest-bearing assets relative to its funding costs. Compare it over successive quarters and investigate reported explanations for changes, such as shifts in funding costs, loan yields or balance-sheet mix. The 3.48% FY2024-25 margin is a historical reference, not a promise that later margins will match it.
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Track gross and net NPA ratios, slippages, provisions and credit costs across reporting periods. These measures provide different views of problem loans and the cost of absorbing losses. HDFC Bank’s 1.33% gross NPA ratio was reported as of March 31, 2025; use newer disclosures before drawing conclusions about current asset quality.
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Recurring earnings versus transaction gains
Separate recurring interest and fee income from trading or transaction gains when comparing periods. HDFC Bank’s Q1 FY2027 results filing, for the quarter ended June 30, 2026, discusses prior-year net trading and mark-to-market gains that included ₹91.3 billion from a partial divestment in HDB Financial Services. Such a gain can affect a year-on-year comparison; it should not be treated as repeatable operating income.
Key risks to weigh
- Funding pressure: If deposits do not keep pace with lending or become more expensive, funding costs could weigh on margins and growth.
- Margin compression: Changes in funding costs, asset yields or balance-sheet mix can reduce the spread that supports interest earnings.
- Credit deterioration: Rising slippages, NPAs, provisions or credit costs could weaken earnings and asset quality.
- Merger execution: Integrating the mortgage business and normalizing funding and balance-sheet measures involve execution; one full post-merger financial year does not establish that every adjustment is finished.
- Earnings volatility: Trading results and one-off transaction gains can make reported comparisons look stronger or weaker than recurring operations.
- Valuation and alternatives: Even a well-performing bank can be a poor investment at an excessive price. The operating figures presented here do not establish whether HDFC Bank shares are attractively valued today or likely to outperform other investments.
How to judge whether the shares fit a long-term portfolio
- Start with a current valuation. Use a dated share price and compare valuation measures with earnings power, book value, return on equity, growth expectations and risks. The full-year figures above are not enough to determine whether the stock is cheap or expensive now.
- Check the newest official results. HDFC Bank’s Quarterly & Annual Financial Results page lists its results materials, including Q1 FY2027. Review the latest disclosures rather than carrying forward FY2024-25 ratios as if they were current.
- Test the operating trend. Compare deposit and advance growth, funding costs, net interest margin, asset-quality measures and credit costs across consistent periods. Separate recurring income from material gains when interpreting changes.
- Compare banks on like-for-like periods. If evaluating peers, use the same reporting period and consider deposit franchise and funding costs, loan growth, margins, asset quality, capital, returns and valuation. Account for merger effects and one-off items before comparing headline growth rates.
- Match the investment to your circumstances. Consider your time horizon, tolerance for equity losses, portfolio concentration and available alternatives. A company’s operating performance cannot determine whether an individual investor should buy its shares.
So, is HDFC Bank a good long-term investment?
The available operating evidence supports a balanced assessment, not a price-sensitive verdict. FY2024-25 showed profit and net interest income growth, faster deposit than advance growth, and a reported reduction in the credit-to-deposit ratio; it also leaves investors needing to monitor margins, funding, asset quality and post-merger execution. Because these figures do not establish current valuation, a long-term decision depends on updated results and market data as well as the investor’s own time horizon and risk tolerance.
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